Swedish Prime Minister talks business in Brazil

Prime Minister Lofven spoke at the Swedish-Brazilian Chamber of Commerce on January 3

Ladies and gentlemen

It is a great pleasure to be here today at the Swedish-Brazilian Chamber of Commerce. Brazil carries a special meaning for me. My many trips to this fascinating country have enriched me both professionally and personally.

Today, Brazil is one of the major emerging economies and a confident global player. Brazil is by far Sweden’s largest export market in Latin America, and we are proud to be one of Brazil’s strategic partners.

To me and to my Government, it is obvious that we should give Brazil the highest priority. We are committed to strengthening our strategic partnership and our bilateral economic and business relations. For these reasons, I have taken this (important) opportunity to visit Brazil.

Swedish industry has a long tradition and a strong presence in Brazil. Our trade relations go back to the late 19th century. Today, more than 70 000 people are employed in more than 200 Swedish subsidiaries and Sweden-related companies.

These are impressive numbers by any standard. And we can still refer to São Paulo as one of Sweden’s biggest industrial cities. As President Lula said during his state visit to Sweden in 2007: “São Paolo really is Sweden’s best factory after Sweden itself”.

Traditionally, Swedish manufacturing companies have dominated our presence here in Brazil. Today, I am happy to see that our commercial ties with Brazil are growing, as both our economies evolve.

A number of Swedish high-tech companies are now operating in Brazil, not least in the life sciences sector. And music streaming service provider Spotify and electronic payment provider iZettle are examples of Swedish service companies that are exploring the Brazilian market.

I want to thank Swedish business representatives in Brazil for your contributions to the rich and diversified bilateral relations that we enjoy today.

But, there are other Swedish companies that we are also very interested in – they are the ones that are not here yet. The size of the Brazilian market provides great opportunities for most Swedish businesses with an international focus.

However, especially our small and medium-sized enterprises may not be aware of these opportunities – or may hesitate to take such a big leap. Here, my Government has the ambition to do more.

My Government intends to develop an export strategy. This strategy will help to boost exports, increase Sweden’s attractiveness for investment and exchange visits, raise the share of exporting firms and enhance the participation of Swedish companies in the global economy.

We have already started the process. But I want to emphasise that the strategy should be developed in close cooperation with the Swedish business community and Swedish companies.

Yesterday, I met with President Rousseff in Palacio Planalto. We had an excellent discussion on how to develop our bilateral strategic partnership in areas such as political dialogue, trade and investment, innovation and the environment.

We agreed that our relations are entering a new phase. One important reason is the recently signed contract between the Brazilian Air Force and Saab of Sweden covering the development and production of 36 Gripen NG fighter aircraft.

The Gripen contract is a joint strategic project, involving a significant share of technology transfer. Developing and producing Gripen here will reinforce Brazil’s already strong position in the global aviation market.

It will also deepen and broaden our relations across the board, and will have many positive spin-off effects in other areas, for many years to come.

Sweden has a long tradition of internationally successful industrial and technological companies – Saab is only one example. There are many reasons for Sweden’s success.

One fundamental factor is the general understanding in Sweden, traditionally shared by industry and the trade unions, that technological progress and increased productivity are essential to ensure that Swedish industry remains competitive in world markets.

Today, Sweden is one of the most innovative countries in the world. Sweden’s research and development expenditure (R&D) as a percentage of GDP is among the highest in the world. The largest share of R&D in Sweden is conducted in companies.

Innovation is key to our competitiveness and attractiveness. Our innovation capacity plays a major role in our ability to create jobs, achieve economic growth and provide welfare.

Innovation is very high on my Government’s agenda. We will establish a National Innovation Council, which I will lead.

Our ambition is to make Sweden a world leader in developing innovative products, services and business models through strong engagement and joint efforts by all relevant stakeholders in business, academia, government and civil society.

We will seek a holistic approach that includes all relevant policy areas. Also, facilitating the development of environmentally sustainable technologies and innovations is one of the primary goals.

Historically, public sector and industry collaboration in Sweden has been an important driver of innovation. We would like to see this collaboration enhanced.

My Government has also announced its intention to develop a re-industrialisation strategy for Sweden – in close dialogue with the business sector.

The main aim of the strategy will be to create more favourable conditions for companies to locate more of their advanced industrial manufacturing and R&D in Sweden.

To achieve this, we will renew efforts to enhance key factors such as supply of know-how, skills development, research and innovation, and improved access to capital for industry.

The strategy forms an integral part of our Government’s overall employment goal – to have the lowest unemployment rate in the EU by 2020.

(Yesterday I listened to president talking about Patria educadora in her inauguration speech) I understand that Brazil is also increasingly investing in education, research and innovation. I am pleased that Sweden is a partner to Brazil in these important areas.

For example, earlier this year our Embassy arranged the third and very successful Swedish-Brazilian innovation week in a number of cities throughout Brazil.

We are also one of the countries participating in the Science Without Borders programme, the scholarship programme launched by President Rousseff a few years back.

I believe that expanding cooperation with Brazil on research, development and innovation is a true win-win situation that will pay off both in the short and long run.

I also discussed trade with President Dilma yesterday. As we know, global trade patterns are constantly evolving, and today trade is largely conducted within global value chains, where different stages of the production process are located across the world.

Inputs are traded between countries, assembled somewhere, and the final product traded again.

Moreover, value chains highlight the need for services, sometimes called the ‘glue’ of global value chains. In fact, trade in services today accounts for a large share of world trade.

The growing fragmentation of production across borders highlights the need for countries to have an open, predictable and transparent trade and investment regime.

Today, tariffs, non-tariff barriers and other restrictive measures impact not only foreign suppliers, but also domestic producers. Restrictions on the movement of people performing services abroad also hamper trade.

The world economy today needs every stimulus to spur global growth. Removing barriers to trade through trade agreements is one such stimulus.

I want to promote free trade both multilaterally and through bilateral free trade agreements – But a free trade based on social justice and respect for democracy, where countries compete with good products and services – not bad working conditions and low salaries.

We can finally see some positive results in the WTO multilateral trade negotiations. And hopefully, we will soon be able to see some progress in the EU-Mercosul negotiations too.

While this requires political leadership both in Europe and in the Mercosul countries, it also needs the support of business communities.

Free trade between our regions would be of mutual benefit and boost growth, employment and innovation in all our countries.

This visit has once again confirmed the excellent relations that Sweden and Brazil enjoy. And I see potential for even stronger relations in the years to come. I invite you all to be part of the exciting journey we are embarking on.